Govt: Hey, About Those Headlines on Youth Unemployment

Headlines on Thursday in the Joong Ang Ilbo and its English-language Korea JoongAng Daily declared, “Joblessness for young hits a 30-year high.” Within hours, government economic officials had dashed off “Yes-but-if-you-look-at-it-another-way” statements in response.

Youth unemployment is one of the most intractable problems facing South Korea. It is the biggest sign of the-miracle-is-over dynamic that politicians and economic leaders seem reluctant to acknowledge and uncertain of fixing.

A combination of forces is causing it. They include the slowing growth potential of the country, an inflexible labor environment that makes it difficult for companies to fire people (which, in turn, makes them reluctant to hire people) and an over-educated population where more than 80% of the people finish college and then seek high-value jobs.

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On Wednesday, as part of the monthly unemployment report, Statistics Korea announced that the number of people in their 20s who had work was 3.53 million, down 106,000 from a year earlier. And that was near the low point set in 1983 of 3.51 million, the Joong Ang newspapers reported.

The agency said the unemployment rate for South Koreans ages 15 to 29 was 7.5%, highest since the 7.7% level reported last June.

After the dour headlines, both Statistics Korea and the Ministry of Strategy and Finance published multi-page statements on Thursday that urged the media and public to consider some broader factors.

The statistics office said that the proportion of unemployed young people looks particularly high because there are fewer of them than at any time since the 1980s. It noted there are now 6.2 million South Koreans in their 20s, down from 7.9 million at the start of 1993 and 7.3 million at the start of 2003.
The statistics office also noted that January is typically has the lowest number for overall employment in a year due to seasonal declines in agriculture and construction work.

Meanwhile, the finance ministry said that the difficult weather conditions – lots of snow and several snaps of ultra-cold temperatures – may have constrained hiring.

While both agencies tried to take the edge off the superlative, both acknowledged that youth unemployment is a major weakness in the economy. “More monitoring is necessary,” the finance ministry said.